This may have been done to death but!

[Dave Goodhew]

Nice post John

 

The word 'Employed' was meant in a non legal way. A few days work on prep was the nature of the post, which most adult applicants understood. Perhaps you could contact the poster (me) to modify post rather than filling your days stating what those who actually work in the industry already know.

 

I assure you this company is fully aware of UK employement law and taxation. Apologies for any bad use of English on the post but I am supporting dozens of very large touring shows not to mention millions of pounds worths of lighting and may have not had time to scan the wanted ad through.

 

Second and last blueroom post. You guys have too much time on your hands making mountains out of molehills.

 

A concurrent post has been automatically merged from this point on.

 

Oh, to the person who started this topic.

 

'He/she who posted this'

 

David Goodhew (Dave is a He name)

Technical Services Manager

Bandit Lites Europe

 

A concurrent post has been automatically merged from this point on.

 

Also mr/mrs Chris topic starter.

 

If that ad makes you angry you are probably not a calm enough personality to handle three months of back to back touring. Please don't call us.

[zonino]

Sorry Dave, I wasn't actually writing that in response to your advert, I was merely commenting that John's post was good at pointing out the ever important distinctions between the self-employed and employees. I'm (un)fortunate enough to be in the position where I need to make distinctions for freelance contracts between self-employed and PAYE on weekly basis. Add this to the law exam I have coming up, it makes the technicalities of contract law feature fairly heavily in my life!

[Guest lightnix]

Nice post John

Yes, an excellent post - there's just one thing, though...

As an employee... It also helps the employer to ensure that the Health & Safety policy is more easily provided for, implemented and demonstrated as an employer has more influence over employees to make sure this happens than they do with a load of sub-contractors...

Couldn't have put it better myself; but if that's really the case, then how come so many companies stick so doggedly to using subcontractors (be they self-emp or Ltd. Co's.)??? :D

 

...when I first went freelance I was asked by several companies to provide my schedule D number and several invoices to other companies so they could prove I was not working exclusively for them. ( mind you I got around that by being a ltd company)

Even if you try to disguise yourself as a limited company it does not completely protect you...

Damn right, John!

 

I've posted this before (search for it if you like), but it basically works like this...

 

The tax regs governing self-employed sole traders are known as IR56, while those governing one-person Ltd. Co's are called IR35. In practice, their requirements are virtually identical; the main difference is in where the tax liability falls...

 

Under IR56, it is the clients responsibility to ensure that the services of subcontractors are engaged under terms and conditions, which define them as self-employed. If they fail to do that, then HMRC will deem all monies paid to said subcontractors are the net pay, on which income tax, NICs and Employer's NICs are still to be paid (along with interest and late payment penalties).

 

Under IR35, that responsibility and liability lie with the subcontractor / freelancer. If you are a one-person Ltd. Co., then the Inland Revenue may look at one or more of your contracts and ask, "If it were not for their Ltd. Co. status, would the terms under which this person was engaged, class them as an employee?". If they decide that the answer to that question is "Yes", then it is the subcontractor / freelancer who is liable for the tax and NI. If you're unlucky enough to find yourself in that position, then HMRC will allow you 5% of the taxable income to cover on-site expenses; you will then pay not only income tax and NICs, but the Employer's NICs as well! :o

 

This is why Ltd. Co. status may not be the ideal trading vehicle for a "tech with a toolkit" type of subcontractor / freelancer (and perhaps why some companies are so keen for their freelancers to be Ltd. Co's).

 

If you can answer 'Yes' to all of the following questions, you are probably an employee.

* Do you have to do the work yourself?

* etc...

 

If you can answer 'Yes' to all of the following questions, it will usually mean you are self-employed.

* Can you hire someone to do the work for you or engage helpers at your own expense?

* etc...

Remember that none of these are a cast-iron guarantee that HMRC will view you as self-employed, except one...

 

According to my accountant, it is the right (or otherwise) of substitution (i.e. whether you can hire someone to do the work for you) that is the ultimate decider as to whether you are self-employed or not and a legal precedent has been set in the courts regarding this. If you are not allowed to send someone to do the gig in your place, then you are not self-employed for the purposes of that contract. End of. It doesn't matter how much insurance, training and PPE you've lashed out on - you are under a Contract of Service and therefore an employee; not the Contract for Services you should be working under to qualify as self-employed.

 

And don't forget - you can be judged to have been employed on one show, but self-employed on another - even for the same client.

 

Mind you, if you (as a freelancer) do exercise the right of substitution, you'll have to make sure that your substitute is self-employed (unless you want to operate PAYE on them), in which case they will need to have the right of substitution, too and if they choose to exercise it... then what? <_<

 

I just don't see how the "subcontractor model" of workforce is sustainable within the business, especially in the current climate; the demands of clients, productions and regulators are becoming too onerous for individuals in general to trade 100% legally as independent entities IMO and it was such concerns which were partly responsible for my own withdrawal from freelancing in the end. The demands and expenses were rising too fast, while the rewards and income were starting to fall; with the increasing threat of litigation in the background, if even something relatively minor went amiss.

 

Operating freelancers under PAYE would clear away a lot of the "fog" surrounding their use and clearly define where the responsibilities lay. It would give employers greater control (albeit with more responsibility) over their workforce and allow them to deliver a more consistent level of service to their clients.

 

Whether the pay would be high enough to persuade people to make a long term career out of working backstage; or whether doing so will become a young persons game, which you play until you find yourself having to settle down and earn a real living, is another matter :D

[cfmonk]

The word 'Employed' was meant in a non legal way. A few days work on prep was the nature of the post, which most adult applicants understood. Perhaps you could contact the poster (me) to modify post rather than filling your days stating what those who actually work in the industry already know.

 

I am fully aware of the issues. It appeared you were not due to poor syntax. I had no interest in you modifying your post, it doesn't bother me either way however I think an interesting and informative discussion has taken place which is a good outcome.

 

I assure you this company is fully aware of UK employement law and taxation. Apologies for any bad use of English on the post but I am supporting dozens of very large touring shows not to mention millions of pounds worths of lighting and may have not had time to scan the wanted ad through.

 

Good and congratulations on your business success.

 

Second and last blueroom post. You guys have too much time on your hands making mountains out of molehills.

 

The actual topic of discussion here has not been about your post, it has rather been about employment law. Which really is more of a mountain than a molehill is it not?

 

 

Oh, to the person who started this topic.

 

'He/she who posted this'

 

David Goodhew (Dave is a He name)

Technical Services Manager

Bandit Lites Europe

 

Was trying to not be too specific. I could have easily copied and pasted "Dave Goodhew" but I wanted this to be a discussion on the legal implications rather than the Ad Hominum discussion you have taken it as / turned it into.

 

 

Also mr/mrs Chris topic starter.

 

If that ad makes you angry you are probably not a calm enough personality to handle three months of back to back touring. Please don't call us.

 

I never claimed I was / wouldn't really want to be / wouldn't have thought of calling you anyway. In what way did I suggest I would? I was merely highlighting something which could get you into difficulties with HMRC but you are obviously well aware of the issues.

 

You appear to have either misunderstood the original post or have again made your point poorly. It was not the AD which made me angry rather the constant misunderstanding / exploitation which happens in the event industry by wrongly classifying employees as sub contractors.

 

Mr Chris